Carlton Corporation has two divisions: Delta and Echo. Data from the most recent month appear below: The company's common fixed expenses total $44,110. The break-even in sales dollars for Echo Division is closest to:
A) $146,756
B) $336,719
C) $214,902
D) $107,317

Question

Carlton Corporation has two divisions: Delta and Echo. Data from the most recent month appear below:  The company's common fixed expenses total $44,110. The break-even in sales dollars for Echo Division is closest to:
A) $146,756 
B) $336,719 
C) $214,902 
D) $107,317

Quizplus · Accepted Answer

Echo Division:
Segment contribution margin = Segment sales − Segment variable expenses
= $147,000 − $86,730 = $60,270
Segment CM ratio = Segment contribution margin ÷ Segment sales
= $60,270 ÷ $147,000 = 0.41
Dollar sales for a segment to break even = Segment traceable fixed expenses ÷ Segment CM ratio
= $44,000 ÷ 0.41 = $107,317

Carlton Corporation Has Two Divisions: Delta and Echo